CASE VIEW ON

MANAGING BRAND EQUITY IN THE DIGITAL AGE:

CROMAS OMNI-CHANNEL RETAILING
Interview
with
Ritesh Ghosal

Ritesh is a student of human

Ritesh G behaviour and its reflection in
hosal, marketplace choices and the
CMO, C implications for products,
r
oma
propositions, brands and their
communication. Over the last
two decades, he has built a
track record of creating new
brands (Tata Docomo, Minute
Maid), re-inventing legacy
brands (Photon, Thums Up,
Maaza) and adapting global
brands to Indian realities
(Coke, Fanta, Sprite). As CMO
at Croma, he is responsible for
all aspects of demand
generation brand,
communication, media,
insights, customer lifecycle
management. He also manages
private label, institutional
business and property for
Croma.
An alumnus of IIM Bangalore,
Ritesh started his career in
advertising and market
research agencies before
moving onto a marketing
assignment at Reckitt
Benckiser. Ever restless and
seeking the thrill of a new
challenge he has worked in 10
organizations across FMCG,
Telecom and Retail. His two
longest and most remarkable
stints have been at Coca Cola
India and Tata Docomo.

Interviewed
by
Dr. Nagendra V. Chowdary
Over the last two decades, he has built a track record of creating
Ref. BM-1-0013B
NEW BRANDS (Tata Docomo, Minute Maid),
June 2016
RE-INVENTING LEGACY BRANDS (Photon,Thums Up, Maaza) and
adapting GLOBAL BRANDS to INDIAN REALITIES.

ET CASES
 Interview with Ritesh Ghosal Managing Brand Equity in the Digital Age: Cromas Omni-Channel Retailing

1. Indian retailing story has been rewritten quite a few times across the last 2-3 decades
and especially during the last 5-6 years with the revolutionary evolution of e-Commerce
and engulfing technology like mobile computing, augmented reality, etc. What
according to you have been the most defining and definitive influences on Indian
retailing story?
These are interesting times for the retail industry in India. Till the end of the 20th century,
the way people shopped, where they shopped, what made a certain piece of merchandise
desirable, even the rules of engagement between shopper and shopkeeper stayed virtually
the same and then hit a series of transformative curves. A miraculously revived from the
dead Shahjehan could have navigated Chandni Chowk of the 1990s with greater ease than
a nostalgic beatnik returning in 2015. The beginning of the 21st century saw the advent
and rapid growth of the mall culture. People abandoned traditional markets in droves to
press their noses against fancy windows of stores with unpronounceable names and
scarcely recognizable merchandise in plush air-conditioned comfort. It took a while but
both retailers and shoppers grew to love this new way of shopping. Yet, just a decade
later, the mall is yesterdays phenomenon and e-com is the way the India of tomorrow is
shopping. Our belief is that the premise of a click versus brick narrative itself is flawed.

THE UNSTATED COROLLARY IS

WE STAND BY YOU

The same generation of Indians that is driving the exponential growth of online shopping
is also driving the traffic to the major retailing districts across Indian cities. A quick traffic
count at any of the leading malls across the top 35-40 cities will reassure the doubters
that there is no dearth of footfall. Yes, the cash registers are depleted as more and more
purchases are diverted to the cheaper prices showcased by e-com marketplaces flushing
speculative funds into discounts in the hope of creating a habit. Without entering into
merits or otherwise of this strategy, one can safely assume that this strategy will have an
end by date. The key question to ponder therefore is what after that? So while the
e-commerce revolution has taken the retail industry by storm, the damage by the storm
may not be irreparable.

ET CASES
Managing Brand Equity in the Digital Age: Cromas Omni-Channel Retailing Interview with Ritesh Ghosal

2. The retailing experts often make a distinction between value creation, value capturing
and value aggregation. What is your view on this as far as Indian retailing is concerned
in general and Croma in particular?
Cromas promise to a customer is built on the twin pillars of expertise and experience and
shored up by the faith people repose in the name of Tata. Therefore, our primary focus has
to be on creating value for the customers. Value capturing through the building of an
effective private label architecture is a journey Croma commenced half a decade ago
however, given the nature of the products we sell, there is a limited potential in this area.

3. The retail industry is shifting toward a concierge model geared toward helping
consumers, rather than focusing only on transactions and deliveries, points out a
Sloan Management article? How is this concierge model being played out in Indian
retail industry in general and Croma in particular?
Our promise to customer has always been We Help You Buy thats the promise we lead
with and thats the value that drives us. The unstated corollary is We Stand by You i.e., if
and when the customer needs assistance of any sort with the product he purchased at
Croma, we offer full support. This is the reason why over half the customers served on a
given day by Croma are repeat customers.

It has always been our constant endeavour to be the ones that assist consumers in their
path to purchase by asking them the right questions and thereafter offer them a product
that best suits their need. Croma continues to be the preferred destination for electronic
purchase with higher brand recall and purchase intent than any of the other store brands.
The familiar red-shirts who help customers navigate the offerings from leading brands of
CDIT, demystify the techno-babble into what it means for the customers life and above
all, the comfort in doing business with a trustworthy retail partner makes Croma the first
port of call for CDIT shoppers. This is even the way we have designed our online experience
i.e., help people search as well as help people buy.

4. Millennials across the world and in India are touted to be major influencers in shaping
up the new retail discourse. How do you think these millennials are influencing Indian
retail story?
The deepening pocket of the so-called young population is paving the way for some
differentiated behaviour within the CDIT category. The year 2016 promises to witness a
swell in demand for items of individual rather than family consumption across categories
owing to the acceleration of both wealth accumulation and propensity to consume. People

ET CASES
 Interview with Ritesh Ghosal Managing Brand Equity in the Digital Age: Cromas Omni-Channel Retailing

earning INR15,000-INR20,000 a month think nothing of spending it all on a cool music

system or the latest smartphone. The early years of the 21st century is when the larger
cities of India started enjoying the demographic dividend hordes of young employed
singles and affluent young families migrated to aggregations of employment and
consumption in a few areas of the cities. This self-confident, self-aware, conscious consumer
of branded merchandise started voting with his wallet and led to the accelerated growth
of modern retail.

5. How do you describe the Indian Digital Consumer? What role do you think digital
consumers are playing in shaping Indian retail both offline and online agenda?
The so called Indian Digital Consumer is the key decider when it comes to shaping the
Retail domain be it changing the way shopping is done or be it in the way of what is
being shopped for. Online shopping has taken this journey of empowerment to the next
level, the shopper has decided to do the smart thing by combining the merits of both click
and brick approaches to buying. Customers are checking out products online and buying
offline, checking out products offline and buying online just not with the same retailers.
The cliff gets steeper for the retailer, cause now its up to the retailers to try to extract the
full value out of the shoppers they are engaging in one platform but losing to the other.
The challenge and the opportunity facing retailers today of both the brick and click
varieties is to create an integrated platform for engaging the shopper and seeing through
the full decision-making process.

CROMA IS ACTIVELY PARTICIPATING IN

CHANNELIZING THIS DIGITAL ENERGY
FOR IMPACTFUL CONVERSATION WITH

6.
THE CONSUMER.

Digital consumers, as has been suggested, are to be engaged through engaging

conversation starters. How is Croma engaging the digital consumers in India?
We have witnessed significant shift in the channels through which consumer engages
with brands, todays consumer would not only like to remain updated but is also open to
share and express his views, opinions and suggestions. Croma is actively participating in
channelizing this digital energy for impactful conversation with the consumer. Content
creation, customization and curations and the 3Cs which is helping Croma stay ahead in
consumer engagement.

ET CASES
Managing Brand Equity in the Digital Age: Cromas Omni-Channel Retailing Interview with Ritesh Ghosal

7. What is omni-channel retailing? What are the nuances of this practice for retailers,
both for online and offline retailers? What is the basic premise of omni-channel
retailing?
Omni-channel retailing is about enabling the customer to experience the brand uniformly
across multiple channels. The product, customer and sales information flows seamlessly
and in absolute real-time and gives the customer one single retail experience.

Two key manifestations of omni-channel retailing are (a) offering visibility to store inventory
virtually and (b) the ability to sell not-in-store inventory in a brick-and-mortar environment.

Apart from the above, technology and human resource are key skills on which successful
implementation of omni-channel rests.

Technology to ensure real-time availability of information to both the website and the
stores and also to ensure an integrated seamless experience to a customer when he
visits the store. Real time integration of inventory management and order management
are critical levers for building this capability which is made possible with technology

Human resource, as they manifest to be the face of omni-channel delivery at the

store. It involves, the store staff to be prepared to receive the customers at the store
and ensure their product is ready to be handed over and also managing the returns
and replacements and shipping out the Express Shipping orders involves a quick
turn-around-time from the store personnel

This also involves the store staff to be prepared to receive the customers at the store and
ensure their product is ready to be handed over and also managing the returns and
replacements and shipping out the Express Shipping orders involves a quick turnaround-
time from the store personnel.

8. What are the business prospects for an offline retailer like Croma going in for
omni-channel retailing? What would be the pressure on margins?
Being the only fully functional omni-channel electronics retailer is a strong advantage
as evidenced by our double digit growth in the festive season. In our category, in todays
context people prefer to buy from a brick-and-mortar store provided the value proposition
is right. Having 100 odd stores in the best of retail destinations to add to our digital
footprint makes us competitive versus e-commerce and pure brick and mortar retailers.
Customers have been quick to appreciate and adopt this new age shopping experience,

ET CASES
 Interview with Ritesh Ghosal Managing Brand Equity in the Digital Age: Cromas Omni-Channel Retailing

with around 1 in 2 store customers first visiting Croma.com and 40% of Croma.com
customers choosing omni services.

As for margin impact, Croma.com does not sell at the same prices as e-commerce
marketplaces. In fact, it sells at exactly the same price as the store. We believe the
customers are willing to pay a justifiable premium to do business with a retailer they
know and trust versus a nameless, faceless seller listed on an online marketplace. Apart
from the value attached to the brand name Croma, there are tangible services we provide
that an online marketplace cannot immediate/same day delivery, assisted on-boarding/
installation, exchange and upgrade, finance at attractive rates of interest.

OUR WEBSITE DOES NOT COMPETE TO

SELL VERSUS E-TAILERS IT ACTUALLY
EXISTS TO DRIVE TRAFFIC TO OUR
STORES.

9. What according to you can be the perceptive differentiators in increasing the sales of
Croma?
Last Diwali we did better than the previous one and this time too Diwali was great. Actually
what works in our favour is that in our category, the consumer really wants to shop at a
physical store. People who do not have stores have to pretend there is nothing more to
shopping than closing the deal at the lowest possible price. However, if one just pauses
for a moment and reflects how we as individuals behave as shoppers, one will realize that
there is much more to the act of shopping than just haggling over prices. We believe
people use digital media to curate their search, shortlist their choices before validating
the same at the store. There are several researches done in India and abroad that confirms
this. Therefore, the way we have designed our online experience is to help people search
as well as help people buy. Our key differentiator over the e-tailers or other brick and
mortar set-ups is our 100 odd stores at key locations which serve as landing pages for
our website. Our website does not compete to sell versus e-tailers it actually exists to
drive traffic to our stores. Consequently, more than half our e-commerce sales are actually
omni-channel sales which either initiates on the web and closes at the store or the
reverse.

ET CASES
Managing Brand Equity in the Digital Age: Cromas Omni-Channel Retailing Interview with Ritesh Ghosal

10. How do you think omni-channel retailing and omni-channel marketing are related?
Are there any best practices especially from Cromas point of view?
For Croma, these are two sides of the same coin. We believe the quest for a new electronic
gadget starts today in the digital world thanks to the seamless access to credible product
information. The natural next step is physical validation of the suitability of the product.
The role of omni-channel marketing is to accost the prospect in the exploration phase and
roll the dice in favour of him choosing Croma as the destination for the physical validation.
Omni-channel retailing i.e., the ability to close the sale at a virtual store for in a physical
store for virtual inventory becomes relevant after this phase when a person is in the price
validation part of the journey. If Croma has won the battle in earlier phases, it makes it
that much easier to charge a justifiable premium in this phase.

As regards best practices for omni marketing, it is honestly too early to conclude. Digital is
a rapidly evolving medium and opportunities to engage come and go faster than ever
before. The only best practice we can recommend is to stay nimble, stay flexible and not
get committed to any big spends on a program that is three months out.

11. What, according to you, are the critical success factors for omni-channel retailing?
Would they be same or would they differ for offline and online retailers?
As already mentioned, technology and human resources are the critical factors for
omni-channel retailing. Technology to ensure that there is a seamless integration of all
the platforms that the customer chooses to transact upon and people to ensure that this
seamless integration is duly gratified at the store.

12. How much of omni-channel retailing is warranted by the impending convergence

between offline retailing and online retailing?
The challenge and the opportunity facing retailers today of both the brick and click
varieties is to create an integrated platform for engaging the shopper and seeing through
the full decision-making process. A platform that would allow the retailer to enter the
conversation early in the shoppers decision-making process, hand-hold him through the
journey and allow him to close the purchase whenever and wherever he is ready to do it.
This would require not just the big brick and mortar brands to invest in virtual brand stores
but also perhaps require the most successful e-com marketplace to create physical retail
spaces. Already today, we see retailers talk of omni-channel services such as click and
collect and virtual aisles. The former allows to take an online shopper to the physical

ET CASES
 Interview with Ritesh Ghosal Managing Brand Equity in the Digital Age: Cromas Omni-Channel Retailing

store while the other extends the merchandise pitched to a shopper already engaged in
the physical space. These are mere indicators of the larger concept to be available to the
customer whenever he happens to be in the mood to shop, wherever the fancy strikes him
and being able to serve him regardless of whether he is just surfing or reaching for the
wallet. Thus, for omni-channel to succeed there is an unwarranted need for a thorough
integration of the online and the offline mode.

13. What have been the key initiatives of Croma in extracting the expected value of
omni-channel retailing?
Distinct requirements of an omni-channel consumer are well understood by Croma over a
period. Services like ordering online & pickup at store, online purchase inside store are
some of the initiatives Croma has focused on which are delivering value from existing and
new Croma customers.

MAJORITY OF CONSUMERS ARE READY

TO PAY JUSTIFIABLE PREMIUM FOR

EXPERIENCE AND ALLIED SERVICES.

14. One of the often-cited critical success factors in an omni-channel retailing is

realignment of supply chains and logistics. How has been Cromas experience in this
to deliver a seamless experience execution for the customers?
Hub & spoke model of distribution for stores has helped Croma is alignment of supply
chain and logistics for omni-channel transactions as well. A single mechanism of fulfilment
for stores as well as e-commerce transactions is providing seamless experience for the
customers.

15. How much of Cromas strategy has been trend-setting and how much has been
responsive, responding to the external environment?
Being the only fully functional omni-channel electronics retailer clearly makes us the trend-
setter. Croma was the first Indian offline CDE retail chain to launch a webstore in 2012.
Since then, several features have been piloted on Croma.com that were all focused on

ET CASES
Managing Brand Equity in the Digital Age: Cromas Omni-Channel Retailing Interview with Ritesh Ghosal

integrating the customer experience between its 93 offline stores in 21 cities across India
and the online store, Croma.com. Most of these omni-channel value-added features have
now been piloted successfully and are live on Croma.com since August, 2015.

Research in developed markets indicates that the most popular omni-channel features on
web stores are: (1) checking Stock Availability at physical stores and (2) Order-online-
pickup-at-stores. Both these features have been available to Croma customers for some
time now, making us adhering to the basis omni requirement norms for quite some time. In
addition, however, some other value added features have been launched in August,
including: Express delivery of select products available in a store that is in the vicinity of
the customer, a Store Locator feature to find out the exact location of a store and for
experiencing the width of product range available at the desired store, ability to order
from the Croma.com range in the physical store by asking the sales staff to place the order
on Croma.com and virtual aisles that gives the customer the choice to explore the entire
range of products without it being stocked at the store.

16. How successful has Croma been in influencing price conscious consumers to BTL
influenced buyers?
With an evolved understanding of consumers Croma is able to provide distinct offerings
and benefits to suit a consumers need. While a CDIT consumer is always price cautious,
majority of consumers are ready to pay Justifiable premium for experience and allied
services. Croma was able to position and occupy consumer mind-set with such offerings.
While a quarter of consumers explore competition before culminating the transaction at
Croma, it is delivered through continuous benchmarking and delivering with an edge.

17. How effective has Croma been in converting Brand Loyal Customers to Store-led
loyal customers?
Cromas brand promise is We help you Buy and therefore, the staff is trained to assess
what the customer desires and to help facilitate the purchase of that item. Therefore,
there is no effort to convert the Brand Loyal Customer at Croma.

Our data shows that the lifecycle of a customer shows varied pattern in brand preference
across categories and products. In categories where he is brand loyal, we focus on delivering
the brand to him and him to the brand; in categories where he is seeking to buy the best
set of features at a smart price, Croma suggests private label options. This is why Croma

ET CASES
 Interview with Ritesh Ghosal Managing Brand Equity in the Digital Age: Cromas Omni-Channel Retailing

has built a huge share in certain categories like Microwaves and ACs but is pretty small or
even absent in others.

18. What is the role of Big Data and Analytics in bolstering omni-channel retailings success?
What has been the experience of Croma in adopting these data aggregation and data
visualization tools to augment its business prospects?
We have witnessed a big explosion in the information which is getting generated by not
only transactions but also through consumer interactions, service delivery and in store
exploration. Croma started the data integration journey way back in 2010 and now it is at
an evolved stage with micro segmentation for consumers, feedback mechanisms and
predicting future demands at store level. The tools deployed come handy for the customer
associate as well as senior management of the organization to take real time as well as
strategic decisions.

19. How successful has Croma been in its forward and backward integration?
Croma defines its role as a retailer for CDIT. Our ambitions to backward integrate are
limited as articulated above, and in terms of forward integration, are limited to ensuring
our customers get the best service from the brands he has chosen to buy.

20. How according to you does Cromas omni-channel retail strategy takes into account
both the type of channel, you are selling on and the varying customer needs based
on super personalization?
We believe people use digital media to curate their search, shortlist their choices before
validating the same at the store. Where the sale actually closes is a matter of offering an
attractive deal. There are several researches done in India and abroad that confirms this.
Therefore, the way we have designed our online experience is to help people search as
well as help people buy. Our advantage over the e-tailers is our 100 odd stores these
serve as landing pages for our digital catalogue, give an experience that the e-tailers
would refer to as augmented reality. Our website does not compete to sell versus e-tailers
it actually exists to drive traffic to our stores. Consequently, more than half our e-commerce
sales are actually omni-channel sales which either initiates on the web and closes at the
store or the reverse. The way to judge the success of our online venture is to look at the
performance of our stores August 15th this year was the biggest August 15th ever for us
and Diwali promises to be a record breaking Diwali.

10

ET CASES